On the up

The majority of companies in the US, Europe, and Asia/Pacific expect to increase their IT spending levels in 2003. However, IDC says economic stability and corporate profits remain key to the IT market rebound.

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By  Matthew Southwell Published  February 26, 2003

The majority of companies in the US, Europe, and Asia/Pacific expect to increase or maintain their IT spending levels in 2003, reports IDC. However, the analyst house also states that economic stability and corporate profits remain key to the IT market rebound. As such, the 85% of organisations that are set to increase or maintain their spending levels will continue to re-evaluate their IT spending throughout the year.

"IT suppliers should monitor economic and business confidence indicators for the early warning signs that IT spending will either exceed or be lower than current projections," says Stephen Minton, programme director at IDC Worldwide IT Markets.

"Just as IT spending was severely disrupted in 2002 by wild card factors including WorldCom and Iraq, so it is that the outlook for 2003 remains clouded by similar uncertainty," he adds.

According to the survey, CEOs are more optimistic than their CIO counterparts on the levels of IT spending increases expected this year. While CIOs look to competitive pressures and changing business needs as triggers for budget increases, CEOs remain focused on the bottom line and the wider economic outlook. Almost half of all CEOs cited low profits and a weak business climate as potential reasons to delay IT spending this year.

"Routine infrastructure upgrades will dominate short-term budget priorities, taking up almost half of all spending in 2003," says Minton.

“This isn't surprising, given that a lot of companies have spent very little during the past two years on the technology which is already core to running their business," he adds.

According to IDC, this pent-up demand is expected to positively impact sales of storage hardware, PCs and network equipment, although price competition will continue to depress overall revenues in these sectors.

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